Legg Mason's (LM) AUM Down in February, Net Inflows Recorded

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Legg Mason Inc.LM , headquartered at Baltimore, reported fall in assets under management (AUM), as of Feb 28, 2018, compared with the prior month. Preliminary month-end AUM came in at $766.7 billion, down 1.7% from January 2018.

February's AUM displayed $2.8-billion fixed income inflows, equity inflows of $0.4 billion and $0.2 billion of alternative inflows, partly offset by liquidity outflows of $0.4 billion. Notably, negative foreign exchange impact of $1.2 billion remained an unfavorable factor.

Legg Mason's equity AUM at the end of February slipped around 4.2% from the prior-month figure to $207.7 billion. Fixed income AUM edged down nearly 1% from the previous month to $421.6 billion. Further, alternative assets decreased moderately to $65.9 billion.

Fall in fixed income, equity AUM and Alternative AUM resulted in long-term AUM of $695.2 billion. The figure marked around 1.8% decline from the previous month. Moreover, liquid assets, which are convertible into cash, moved down slightly to $71.5 billion.

Competitive Landscape

Franklin Resources BEN has announced preliminary AUM by its subsidiaries of $744.9 billion for February 2018. Results display 3.4% drop from $770.8 billion recorded as of Jan 31, 2018. Net market losses and outflows were primarily responsible for this decline. However, the figure inched up around 1% from the prior year.

T. Rowe Price Group, Inc. TROW reported preliminary AUM of $1.02 trillion for February. Results reflect 2.9% fall from $1.05 trillion as of Jan 31, 2018. Client transfers from mutual funds to other portfolios totaled $4.8 billion for the month.

Invesco Ltd. IVZ reported preliminary month-end AUM of $945.4 billion for February 2018. The figure indicates 2.8% drop from the prior month. The AUM declined due to unfavorable market returns, foreign exchange, non-management fee earning AUM outflows and net long-term outflows, partially offset by higher money market AUM. Notably, FX decreased February AUM by $5.1 billion.

Our Viewpoint

Legg Mason has the potential to outperform its peers over the long run, backed by a diversified product mix and leverage to the changing market demography. Nonetheless, absence of continued growth in equity markets and foreign-exchange fluctuations remain headwinds.

Legg Mason currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here

Shares of the company have increased around 10.9% over the last six months, underperforming 13.5% growth recorded by the industry .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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